Eco-Tek Group, Inc. (OTCMKTS:ETEK) Brought Back By Extensive Pump
A ticker that popped up during yesterday’s trading was Eco-Tek Group, Inc. (OTCMKTS:ETEK). We hadn’t seen the company since February when the first pump for them was initiated. Back then ETEK had double the price per share reaching as high as $0.73 on the wings of the artificial hype. But when the emails stopped, came the crash and in a little more than a week the stock plummeted down wiping 40 cents of its value. Investors bailed and from April trading has been sporadic on negligible volume.
That’s why for some the 37% surge and 1.3 million shares traded yesterday may have been a surprise. In reality there is only one thing that can facilitate such a sudden resurgence and that is another paid promotion starting for the stock. And this time around the sums handed around are no small matter. BC ltd., the entity handling the current pump, is managing a budget of $450 thousand. First they hired FutureMoneyTrends, LLC. to create a landing page for ETEK in which the company was issued a price target of $2.50 among other bombastic projections for the future.
Then a host of newsletters started to do their part in spreading awareness among investors resulting in more than 20 different alert emails sent in a single day. The pumpers are of all kinds and shapes ranging from TooNiceStocks who bagged the hefty compensation of $170 000 to Leading Stock Alerts who got paid just $2500 for their services. Unfortunately we would need quite a bit of space if we want to list all of the affiliates of Stock Appeal, James Connelly, Market 365, MJ Capital that were part of the campaign.
Taking a look at the financials of ETEK makes it clear why such extreme measures are needed in order to boost the stock. According to the latest quarterly report, the company finished the period ending March 31 with the following results:
- $8956 cash
- $71 thousand total current assets
- $1.1 million total current liabilities
- $53 thousand revenue
- $189 thousand net loss
But even though these number are much worse then the ones for the same period last year, they are not the biggest issue we have with the company. No, that honour goes to the millions of shares handed out for unbelievably low prices.
The current company came into existence after a reverse merger between Sandalwood Ventures, Ltd. and Eco-Tek Group, Inc. When Sandalwood became public it sold 2.7 million shares to seed shareholders for $0.02 per share accompanied by warrants for the purchase of another 2.7 million shares for $0.05. Then a 28-for-1 forward split turned that number into 76 million shares for $0.0007 each but even these prices are higher than the ones that came next.
ETEK has been issuing quite a few convertible notes that allow their holders to get millions of shares at a price of $0.000357 per share. As a whole the notes can be converted into 668 million shares who can bring significant profits at the current price of $0.371 of the ticker. Also keep in mind that in their own words, ETEK well have to find at least half a million in order to continue operations for the next year so even more notes will be required.
Investors should be careful when trading stocks displaying some of the characteristic aspects of a pump scheme. Or companies using famous celebrities as is the case with
Premier Brands, Inc. f/k/a Tracksoft Systems Inc (OTCMKTS:BRND). They almost doubled in value by gaining 96% on most likely the name of Dennis Rodman alone considering all the red flags around the company. Primco Management Inc. (OTCBB:PMCM) were cut in half when the ticker lost 46%. The drop comes right after the 577% surge during Friday’s session.
